North Sea Oil and Gas Producers: Investment Allowances

Lord Grocott Excerpts

Tuesday 7th June 2022 Lords Chamber

[Baroness Penn (Con)]

As I have explained to the House, this is not a subsidy, but an investment allowance which is part of an additional levy on oil and gas producers. Therefore, they receive the investment relief attached to it. As I have said to the House—and I am really happy to say it again—we are absolutely committed to increasing renewable energy in this country. We agree that it is cheap and clean, and an essential part of our path towards net zero.

[Lord Grocott (Lab)]

My Lords, the Minister has been talking about an energy profits levy, which she says will raise about £5 billion a year. We have been talking, as she knows, about a windfall tax, so can she explain to the House the difference between a levy and a tax?

[Baroness Penn (Con)]

One of the crucial differences is the investment allowance we have just been discussing, to ensure that the levy we have in place does not disincentivise investment in the North Sea, which will be really important to longer-term energy security if we face similar situations in future. Another difference is that this levy will raise about £5 billion, allowing us to give around £1,200 to the most vulnerable households, unlike the plans from the party opposite, which would have raised around £2 billion to £3 billion, giving £600 to the most vulnerable households.